Published: 25 August 2016
Gross mortgage lending held steady in July and was an estimated £21.4 billion, according to the Council of Mortgage Lenders. This closely matches June’s gross lending total of £21.5 billion and is 1% lower than July last year (£21.6 billion).
Commenting on market conditions in this month's market commentary, CML chief economist Bob Pannell said:
Indicators are likely to provide truer readings of market conditions the further we move away from the distorting effects of April’s stamp duty change. The subdued nature of property transactions and mortgage lending in July are consistent with a less positive backdrop for house purchase activity post-referendum.
The Bank of England expects stronger economic headwinds to build as we move into 2017, and the Monetary Policy Committee’s package of monetary policy measures represents a spirited effort to lean against these on a timely basis. The MPC has pencilled in a further cut in Bank Rate later this year, but aims to avoid negative interest rate territory.
The Term Funding Scheme should boost market sentiment a little, by engineering broader cuts to rates for existing mortgage borrowers than would have been the case, but it is not clear how well the Bank’s actions will underpin borrower demand in a more adverse economic climate.
Notes to editors
1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 97% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.
2. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly mortgage lending press release and gross lending press releases relate to mortgage advances only. A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender.
3. The CML's gross mortgage lending estimate for August will be published on Thursday 22 September 2016.
4. This month's full market commentary can be viewed on the CML website under the News & Views - Analysis section.